Lage Steps Down As Norwood President
As first reported in a Breaking News Alert on Friday, Paul Lage has announced his resignation as president of Counselor Top 40 supplier Norwood. While Lage will leave the company on April 15, he told Counselor that he intends to remain in an advisory role with Norwood and its parent BIC Advertising & Promotional Products (BIC APP) "for a short period" following that point. "I am 100% focused on the transition of Norwood into the BIC organization," Lage said. "It's important to me that they're both successful, and I'm supportive of their vision."

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Nicolas Paillot, CEO of BIC APP, said in a statement that Lage's "industry expertise and leadership" would be missed. "Paul has been a key member of our management team," Paillot said. "On behalf of all of us at BIC, I want to thank him for his contributions and wish him ongoing success."

Following BIC's purchase of Norwood last summer for $125 million plus assumed liabilities of $36.5 million, the parent company formed BIC APP, which consists of BIC Graphic (asi/40480) and Norwood. The company then announced last month that it would move Norwood's headquarters from Indianapolis to BIC's location in Clearwater, FL. Throughout, the organization has maintained that both BIC Graphic and Norwood would operate as separate divisions and Lage said that is still the plan. "Right now, it's separate," he said in an interview yesterday. "The management teams are working to figure out the future structure. There are a lot of things being evaluated."

Lage, who says he intends to stay in the industry, said it's yet to be determined who his replacement at Norwood will be. As for his decision to leave Norwood after a little less than four years at the helm (he joined the company in June 2006), Lage said the time was right. "Norwood is much stronger now," said Lage, who was named the Counselor Person of the Year in 2007. "We're in a transition process right now, and moving forward I would have been involved in more sales and marketing areas. My personal wants and goals are to run an entire organization. It was right to do this now before the move."

Lage said Norwood remains on schedule to complete its headquarters relocation by the end of this year.

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Companion Health Care Bill Signed
Today in Virginia, President Obama signed into law the Health Care and Education Reconciliation Act of 2010, the companion bill to earlier reform measures that include provisions to the Physician Payment Sunshine Act. After a series of Congressional amendments, the combination of bills has limited the number of reporting exceptions granted to drug and medical device companies regarding their reporting of payments and gifts to doctors. Now, companies will be forced to report any gifts or payments made to doctors that are individually worth more than $10 or collectively worth more than $100 in one year.

Starting in 2013, all payment disclosures made to the Department of Health and Human Services will appear on a public Web site. The site is designed to increase the transparency of relationships between drug manufacturers and physicians, discouraging kickbacks in the form of extravagant gifts. Failure to report "payments," a designation that includes promotional products, could lead to penalties of up to $100,000 for each non-disclosure. According to the provisions, the reporting must begin on January 1, 2012, with the first publicly searchable online database scheduled to be available on September 30, 2013. Because the bills contain only limited preemption from local action, states may still impose additional requirements as well.

Under the new laws, many more businesses will also be required to provide health insurance for their employees. To help manage costs, business owners will have the opportunity to take part in state-run insurance exchange pools, which leaders hope will reduce the price of plans. Additionally, starting with the 2010 tax year, companies with 25 or fewer employees who meet certain wage requirements will be able to earn tax credits toward health insurance purchases.

Separately, ASI senior vice president Dale Denham traveled to Washington, D.C. last week along with 30 other industry professionals to lobby Congress on behalf of the advertising specialty industry. Denham was joined by three fellow Pennsylvanians and industry professionals (Art & Barbara Bustard and George Jackson) in visiting Senators Specter and Casey, as well as Representatives Gerlach, Murphy and Schwartz. "I was impressed at how open the Senators' and Representatives' staffs were to what we had to say," Denham says. "While it is clear calls and letters make a difference, the visits are far more effective as we were able to spend nearly 30 minutes with each office discussing several important issues to our industry."

In addition to the impact of the health care bill on the ad specialty market, the group also discussed other important issues with Congress:

Promotional products are effective advertising tools, NOT gifts and the importance of promotional products to jobs and to their own campaigns.

Creating an appropriate tax incentive to use promotional products in safety programs as part of wellness programs.

The negative effects on the industry due to the Consumer Product Safety Improvement Act timeline and lack of clear details.

The negative effects of the pending Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (S.2882) on independent contractors.

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Top Apparel Suppliers Release Q4 Reports
A pair of Counselor Top 40 apparel suppliers released reports last week regarding their Q4 sales. Broder Bros. Co. (asi/42090) reported $182.8 million in fourth quarter net sales in 2009, down from $219.5 million in Q4 2008 and a decline of 16.7%. Separately, American Apparel (asi/35297) said that its fourth quarter profits fell 21% even as it notched a 6.1% increase in its wholesale revenues.

In a report released on March 26, Broder noted its unit volume in the fourth quarter fell 15% and its gross profit declined by 25%, saying much of that reduction was "due to market share loss." For the year, the company reported net sales of $705.2 million compared to $926.1 million for fiscal 2008.

The report did strike a positive note, saying "management believes that the Company has begun to regain lost market share … [which] began approximately at year-end in line with management's guidance following the end of the third quarter." The supplier reduced its operating expenses by nearly 25% in the fourth quarter compared to one year ago, thanks primarily to $4.1 million in savings through debt restructuring as well as a combination of layoffs the previous year and lower variable expenses. Last May, the supplier had exchanged $213.5 million existing notes due in 2010 for $94.9 million in new notes due in 2013.

Meanwhile, American Apparel reported a total of $38.5 million in wholesale sales in Q4 this year, compared to $36.3 million in Q4 2008. Even with its increase in overall net sales (up 8.6%) in the quarter, the supplier suffered declining profits thanks to a 10% jump in operating expenses as well a 7% decrease in sales for retail stores open at least a year. In its released report, the company noted "a substantial reduction in manufacturing efficiency at the company's production facilities" in Q4 2009, saying the problems "were principally a result of the forced termination of over 1,500 experienced manufacturing employees." Under new immigration crackdowns last September, American Apparel laid off employees who could not provide legal documentation to work in the U.S.

For 2009, American Apparel experienced a decrease in its wholesale business, declining 13.6% to $142.1 million compared to $164.4 million the previous year. Net sales as a whole for the company were $558.8 million, a rise of 2.5%. "Despite the many challenges our business faced in 2009, we delivered on our overall goal to generate significant cash flow from operations, resulting in a substantial reduction in debt in the second half of the year," said CEO Dov Charney in a statement. Charney cited bolstering the company's manufacturing efficiency and enhancing retail sales as American Apparel's main goals for this year.

Tuesday Morning Radio Show Live On The Air
Every Tuesday morning from 10:30 a.m. eastern time to 11:00 a.m., a team of ASI editors debate the most important topics facing the industry. We also, of course, offer our own off-beat look at the market. This morning, we discussed inexpensive ways to boost morale, debated whether ethics are good for the bottom line, and shared a unique branding strategy. Plus, we even took questions from callers looking for ways to recover lost sales.

If you missed the show, don't worry. A recording is now available at www.asicentral.com/radio. And, don't forget to join us next Tuesday, April 6, for our next radio broadcast. Log on to www.asicentral.com/radio at 10:30 a.m. eastern time and give us a call at 215-953-4979. We want to hear from you!

The Joe Show: Hot Products In this episode of The Joe Show, Counselor Managing Editor Joe Haley shows off some of the newest items to hit the ad specialty market. Want to wow clients with the latest promo products available? Start with these.

Fed Issues New Gift Card Rules
The Federal Reserve issued new rules last week that restrict the fees and expiration dates that may apply to gift cards. The new guidelines, which go into effect on August 22, ban gift card issuers from charging dormancy, inactivity and service fees on any gift card within a year of purchase. Separately, the Federal Reserve's new gift card rules mandate that card companies can only tack on one fee per month after the first year of a card's lifetime, and these charges have to be clearly disclosed to purchasers and users.

"Concerns have been raised regarding the amount of fees associated with gift cards, the expiration dates of gift cards, and the adequacy of disclosures," the Federal Reserve said in a statement. "Consumers who do not use the value of the card within a short period of time may be surprised to find that the card has expired or that service fees have reduced the value of the card."

Under the new rules governing sales of gift cards, three conditions must be met before issuers can charge inactivity or service fees. Fees can be applied only if the consumer hasn't used the card within a one-year period, if there's no more than one fee charged per month and if consumers are made aware of such fees beforehand. "These new rules will curb the abusive fees and early expiration dates that can drain gift cards of their value before they are even used," said Senator Charles Schumer (D-NY).

The Fed's new guidelines cover retail gift cards and network-branded gift cards, which are redeemable at any merchant that accepts the card – such as American Express and Visa gift cards.

Last Chance: Take The State Of The Industry SurveyCounselor is currently polling professionals in the industry – both distributors and suppliers – to see how the market did in 2009 and to get impressions on where the industry is headed in 2010. We need your input. Please take some time to click the appropriate link below and complete the annual State of the Industry survey. Your responses will remain anonymous and you'll be helping to create Counselor's annual State of the Industry report.

Vote Now For Best Ads Of 2009
The finalists have been chosen for the Advertising ASI Spirit Awards. Now, all we need is your input. Please click here to vote in the Best Ads categories for Counselor, Email Express, ESP Online, catalogs and Advantages, and for Best Innovative New Product. You can select up to three per category; limit of one ballot per person, please.

ASICentral: Top 10 Eco-Friendly Giveaways
What are some of the most popular – and conversation inducing – eco-friendly items in the ad specialty industry today? Would you believe a journal made out of elephant poo made the list?!

Zagwear (asi/365552) announced that it has partnered with Earth Day Network to create an online store of eco-friendly activewear and accessories manufactured by Anvil Knitwear (asi/36350). Sales of the products will benefit Earth Day Network programs, which include environmental education.

People On The Move
Barker Specialty Company (asi/132690) has announced that Adrienne Barker has received the MAS industry certification.

With Debco...good things come in small packages asi/48885 - Folding totes have just arrived in fabulous shapes and colors! View Special...

Custom Logo Style Adirondack Furniture Delivers Branding Impact-Made in USA asi/52827 - Built by a network of local craftsmen located throughout the United States. These avid woodworkers work out of their individual workshops to provide the highest quality, handcrafted outdoor furniture available. FREE DELIVERY in most metro areas! View Special...

Is your sanitizer skunk fragrance? You better check! Ours is anti-skunk! asi/67636 - Finally, direct from the manufacturer to you. Simply the highest quality lip balm and sanitizer at the lowest price...period. Check for yourself! American made in an FDA audited and registered facility. Compare for yourself! View Special...

The Ultimate Corporate Gift For Only $2.00(A) asi/91530 - Enjoy unbeatable savings on Adva-Lite’s Aquarii™ Pocket Light! This corporate gift-quality item is now available for only $2.00(A). Supplies are limited! Order today. View Special...

DEADLINE TO SAVE $100 FOR THEASI WOMEN’S SUMMIT IS THIS WEEK
Don’t miss the ASI Women’s Summit taking place May 4, 2010, at the Millennium Broadway Hotel in New York City from noon-3:30 p.m. Designed for women in the advertising specialty industry, the ASI Women's Summit will provide a lively environment to develop new relationships while discussing new business approaches with colleagues. The action-packed afternoon schedule will include a networking reception, luncheon and two Keynotes by real estate mogul Barbara Corcoran and Rosalie Marcus, The Promo Biz Coach™. (Sponsored by Fields Mfg., asi/54100 and J. Charles Crystalworks, asi/62985.)

HOUSING IS NOW OPEN FOR ASI CHICAGO
The largest show of the summer, ASI Chicago, is taking place July 13-15 at McCormick Place. Register today and plan for a strong fourth quarter as you are sure to leave with innovative, holiday products and ideas. You’ll see leading suppliers, find thousands of new items, attend top-notch education and network during daily events. Plus, learn how to close “Your Biggest Deal Ever” during a free Keynote on July 15 by Tom Searcy.Registration and housing are both open at www.asishow.com. ASI distributor and decorator members can attend ASI Chicago for free and receive up to $100 toward a hotel room.

ASI Holiday Preview Show in Las Vegas on September 13 & 14, 2010The ASI Holiday Preview will be taking place Monday, September 13, and Tuesday, September 14, at the Sands Expo Center in Las Vegas.
Featuring leading ad specialty suppliers showcasing their seasonal products in a tabletop setting, along with free education focused on ways to boost revenue, the ASI Holiday Preview is a surefire way to guarantee a strong sales quarter.
The event opens with the popular “New Distributor Success Track” from 1 p.m. to 5 p.m. on Monday, September 13. Tuesday, September 14, will feature “Exhibitor Presents” from 9 a.m. to 10 a.m., with exhibitors presenting their hot new products for the holiday season. Tabletop exhibits are open from 10 a.m. to 4 p.m., and are followed by a closing networking reception at 4 p.m.
Distributors may register now for the ASI Holiday Preview in Las Vegas at www.asishow.com. The web site for hotel registrations will be open there by week’s end. The Venetian Hotel is the official show hotel, where a limited number of hotel rooms have been secured at $149 (half off the usual rate of $300).
Follow The ASI Show on Twitter and become a fan on Facebook today!

The following are the dates and locations for The ASI Show in 2010:
New York: May 4-6
Chicago: July 13-15
Plus, don't miss the ASI Advantages Roadshow, the industry's #1 traveling show. Visit www.advantagesroadshow.com for the complete schedule and go to www.asishow.com for
information on all ASI Shows.